Nero and other emperors reduced the currency in order to supply a demand for more coins. By reducing the currency, the coins only represent the silver or gold it had once contained.
In two years, from 268-270 A.D. a denarius used to be 100% gold, but after two years the denarius had just 0.02 gold.
Inflation was a major cause of Romes downfall
One reason rome had inflation is that since slaves didn't have to pay taxes, they didn't have enough money to pay for everything in the empire, so they made more.
The Romans sometimes hoarded products and only sell them in small quantities so there prices would sky rocket
Rome experienced something called hyper inflation which is monetary inflation occurring at a very high rate.
Over the period 218 to 268 A.D. the silver content of Roman coins dropped to one five thousandth of its original level.
Merchants stopped selling goods but this led to penalties against hoarding. Diocletian countered with laws saying that every man had to pursue the occupation of their father. The penalty for not doing so was death.
All the inflation started after the death of marcus aurelius
Problems with Inflation Today
- Inflation is at just 2.5 cents a year
-food inflation is a pretty big problem and it tends to happen in three year cycles.
-Inflation has many upsides, for instance, if you are in debt, as the value of money slowly decreases, so does the value of your debt.
-wipes out the purchasing power of private and public savings
-loaners can loose lots of money
-some countries have to go back to hard money.
-makes money almost worthless
-It leads to high unemploymemt
-It gets in the way of buying and selling
Citations
-"Episodes of Hyperinflation." Episodes of Hyperinflation. N.p., n.d. Web. 15 Jan. 2013.
Roman Inflation
Problems with Inflation Today
- Inflation is at just 2.5 cents a year
-food inflation is a pretty big problem and it tends to happen in three year cycles.
-Inflation has many upsides, for instance, if you are in debt, as the value of money slowly decreases, so does the value of your debt.
-wipes out the purchasing power of private and public savings
-loaners can loose lots of money
-some countries have to go back to hard money.
-makes money almost worthless
-It leads to high unemploymemt
-It gets in the way of buying and selling
Citations
-"Episodes of Hyperinflation." Episodes of Hyperinflation. N.p., n.d. Web. 15 Jan. 2013.
-"Chapter 7: Inflation." Chapter 7: Inflation. N.p., n.d. Web. 16 Jan. 2013.
-"Plebeians." Plebeians. N.p., n.d. Web. 23 Jan. 2013.
Possible conacts
-Stan V. Smith, Ph.D: info@SmithEconomics.com
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Questions I could ask.
Link:
http://prezi.com/k3usl_3giujy/saving-rome-inflation/?kw=view-k3usl_3giujy&rc=ref-29368865